Investing in real estate is one of the most reliable ways to build wealth, but it requires precise calculations to ensure profitability. A Rental Property Cash Flow Calculator helps investors determine if a property will generate income or drain their savings.
Understanding the Key Metrics
Gross Rental Income: The total amount of money collected from tenants each month.
Operating Expenses: Costs required to run the property, including taxes, insurance, maintenance, HOA fees, and property management.
Net Operating Income (NOI): This is calculated by subtracting operating expenses from gross income (excluding mortgage payments). NOI is a crucial metric for determining the raw profitability of the asset.
Cash Flow: The money remaining after all expenses and mortgage payments have been made. Positive cash flow means the property pays you; negative cash flow means you pay for the property.
What is Cash on Cash Return?
While Cash Flow tells you the dollar amount you earn, Cash on Cash Return (CoC) tells you how hard your money is working. It is calculated by dividing your Annual Cash Flow by the Total Cash Invested.
Formula: (Annual Cash Flow / Total Cash Invested) x 100
For example, if you invest $50,000 (down payment + closing costs) and the property generates $5,000 in positive cash flow per year, your Cash on Cash Return is 10%. This metric allows you to compare real estate returns against other investment vehicles like stocks or bonds.
The 1% Rule and 50% Rule
Experienced investors often use "rules of thumb" for quick screening:
The 1% Rule: Suggests that the monthly rent should be at least 1% of the purchase price. For a $200,000 house, rent should ideally be $2,000+.
The 50% Rule: Estimates that 50% of your rental income will go toward operating expenses (excluding the mortgage). If rent is $2,000, expect $1,000 in expenses.
While these rules help with quick filtering, using a detailed calculator like the one above is essential for making the final purchase decision.
function calculateRentalCashFlow() {
// 1. Get Inputs
var price = parseFloat(document.getElementById('rp_price').value);
var downPercent = parseFloat(document.getElementById('rp_down_percent').value);
var interestRate = parseFloat(document.getElementById('rp_interest').value);
var termYears = parseFloat(document.getElementById('rp_term').value);
var closingCosts = parseFloat(document.getElementById('rp_closing_costs').value);
var rent = parseFloat(document.getElementById('rp_rent').value);
var annualTax = parseFloat(document.getElementById('rp_tax').value);
var annualInsurance = parseFloat(document.getElementById('rp_insurance').value);
var monthlyHOA = parseFloat(document.getElementById('rp_hoa').value);
var maintPercent = parseFloat(document.getElementById('rp_maintenance').value);
// Validation
if (isNaN(price) || isNaN(downPercent) || isNaN(interestRate) || isNaN(termYears) || isNaN(rent)) {
alert("Please enter valid numbers for all required fields.");
return;
}
// 2. Calculate Mortgage (Principal & Interest)
var downPaymentAmount = price * (downPercent / 100);
var loanAmount = price – downPaymentAmount;
var monthlyRate = (interestRate / 100) / 12;
var numberOfPayments = termYears * 12;
var monthlyMortgage = 0;
if (interestRate === 0) {
monthlyMortgage = loanAmount / numberOfPayments;
} else {
monthlyMortgage = (loanAmount * monthlyRate * Math.pow(1 + monthlyRate, numberOfPayments)) / (Math.pow(1 + monthlyRate, numberOfPayments) – 1);
}
// 3. Calculate Expenses
var monthlyTax = annualTax / 12;
var monthlyInsurance = annualInsurance / 12;
var monthlyMaintenance = rent * (maintPercent / 100);
var totalMonthlyExpenses = monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance + monthlyMortgage;
// Note: NOI usually excludes mortgage (Debt Service), but for "Total Monthly Expenses" display we often group them or separate them.
// Let's calculate purely operational expenses for NOI.
var operationalExpenses = monthlyTax + monthlyInsurance + monthlyHOA + monthlyMaintenance;
var netOperatingIncome = rent – operationalExpenses;
// 4. Calculate Cash Flow
var monthlyCashFlow = rent – totalMonthlyExpenses;
var annualCashFlow = monthlyCashFlow * 12;
// 5. Calculate ROI (Cash on Cash)
var totalInvestment = downPaymentAmount + closingCosts;
var cashOnCash = 0;
if (totalInvestment > 0) {
cashOnCash = (annualCashFlow / totalInvestment) * 100;
}
// 6. Display Results
document.getElementById('res_mortgage').innerText = "$" + monthlyMortgage.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_expenses').innerText = "$" + totalMonthlyExpenses.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_noi').innerText = "$" + netOperatingIncome.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cashFlowEl = document.getElementById('res_cashflow');
cashFlowEl.innerText = "$" + monthlyCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
// Color coding for positive/negative cash flow
if (monthlyCashFlow >= 0) {
cashFlowEl.className = "rp-result-value rp-highlight";
} else {
cashFlowEl.className = "rp-result-value rp-highlight-negative";
}
document.getElementById('res_annual_cashflow').innerText = "$" + annualCashFlow.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('res_investment').innerText = "$" + totalInvestment.toLocaleString('en-US', {minimumFractionDigits: 2, maximumFractionDigits: 2});
var cocEl = document.getElementById('res_coc');
cocEl.innerText = cashOnCash.toFixed(2) + "%";
if (cashOnCash >= 0) {
cocEl.className = "rp-result-value rp-highlight";
} else {
cocEl.className = "rp-result-value rp-highlight-negative";
}
// Show results
document.getElementById('rp_results').style.display = "block";
}